Wholesale Market Conduct

The Central Bank of Ireland ("Central Bank") is the competent authority in Ireland for wholesale market conduct supervision under a range of legislation. Wholesale financial markets regulation encompasses complex interconnected markets, a wide range of financial products and a large and varied group of professional market participants.  The conduct of market participants has a profound impact across all financial activities and increasing trust and confidence in the markets aids fairness and transparency, prerequisites for trading in integrated financial markets and for maintaining confidence in markets as a critical source of capital.

In 2018, the Central Bank established a dedicated function, the Wholesale Market Conduct Team tasked with carrying out market conduct risk assessments of financial service providers and market participants engaging or applying to engage in wholesale market activity. A number of industry communications have been published to date which include key findings and expectations from completed assessment processes. See link to related press release below.

5 Principles for a Proper and Effectively Regulated Securities Market

The Central Bank will continue to engage with industry in relation to wholesale market conduct risk. We will be guided by the expectations that were set out in the letter to industry participants in March 2019 and our 5 principles for a proper and effectively regulated securities market. Under these principles a proper and effectively regulated securities market is one that:

  1. Provides a high level of protection for investors and market participants
  2. Is transparent as to the features of products and their market price
  3. Is well governed (and comprises firms that are well governed)
  4. Is trusted, by both those using the market to raise funds and those seeking to invest
  5. Is sufficiently resilient to continue to operate its core functions in stressed conditions and is able to innovate appropriately as markets evolve.

Industry Communication – October 2023

The Central Bank of Ireland recently undertook a Conduct Risk Assessment of Telephone and Electronic Communications (“the Assessment”) in firms engaged in securities markets activity.  The Central Bank published an Industry Communication which details the main findings of the Assessment which included deficiencies in policies and procedures, monitoring and testing, controls and training.  The Industry Communication sets out the Central Bank’s expectations and notes that firms should continue to focus on driving continuous improvement in their frameworks regarding telephone and electronic communications.

Conduct Risk Assessment of Telephone and Electronic Communications | pdf 286 KB

Industry Communication - June 2023

The Central Bank published a report on a thematic assessment on the role of the Board and senior management in fostering an effective conduct-focused culture in regulated firms engaging in wholesale market activity. The report details the main findings of the assessment in areas such as leadership and decision-making, speak-up culture and hybrid working arrangements. The report sets out aspects of good practice and areas for improvement for firms to consider in the context of their own business models.

Thematic report Fostering an effective conduct-focused culture | pdf 945 KB

MAR Industry Communication - July 2021

MAR applies to a broad range of market participants all of whom play a role in maintaining market transparency and integrity. The Central Bank issued three industry letters to relevant market participants 1. Persons who transmit and receive or execute orders and transactions in financial instruments, 2. Issuers and 3. Persons who act on behalf or on account of issuers (Advisors). Each letter provides an overview of the key findings from the Central Banks 2020 market abuse supervisory work. It also sets out the Central Banks expectations in relation to MAR compliance standards (building on our 2021 securities market conduct communication including the Securities Markets Risk Outlook Report). View press release Central Bank publishes findings of review into market abuse risks.

Regulated Entities - MAR Requirements to Trade Surveillance and Reporting of Suspected Market Abuse

Issuers - MAR Requirements to Recognise, Publish and Manage Inside Information

Advisors - MAR Implications for Advisors to Issuers

Industry Communication - January 2020

The Central Bank issued a second industry communication in relation to securities market conduct risk, which provides an overview of the key findings from the Central Bank's 2019 market conduct supervisory work. It also sets out areas where regulated entities should improve their organisational arrangements for managing market conduct risk and includes further expectations for regulated entities and issuers (building on the March 2019 industry communication). Finally, the letter outlines areas of focus for Central Bank market conduct supervisors, in 2020.

Securities Markets Conduct Risk - Dear CEO Letter | pdf 734 KB

Industry Communication - March 2019

The Central Bank wrote to existing and incoming financial service providers to set out its expectations in respect of how these financial service providers identify, mitigate and manage market conduct risk. A copy of this letter, which applies to all financial service providers engaging in wholesale market activity, irrespective of scale or business model can be found below.

Wholesale Market Conduct Risk - Dear CEO Letter | pdf 710 KB